(Updates with drafting final text, cancelling Wednesday talks)

By Peter Blackburn

BRUSSELS, Oct 18 (Reuter) - The European Union and Morocco

were set on Wednesday to wrap up a new fisheries agreement by

the end of the week.

"All the elements are there to finish within the week,"

European Commission fisheries spokesman Filippo di Robilant told

reporters.

The talks will settle the technical details of a political

compromise, announced on Friday by EU Fisheries Commissioner

Emma Bonino, which ended months of deadlock over renewal of the

EU's most important fisheries agreement.

At stake are the fate of 730 fishing vessels currently tied

up in Spanish and Portuguese ports and 40,000 jobs.

Di Robilant said things were moving faster than expected and

a plenary negotiating session, planned for Wednesday, was now

unnecessary.

Joint working groups had already started to draft the final

text and would continue on Thursday, he added.

Di Robilant said the two sides had reviewed the compromise

when they formally started the seventh round of negotiations on

Tuesday evening.

During a 90-minute session the EU and Morocco listed points

which still had to be discussed. These included minor fish

species such as hake, control measures, licensing and inclusion

of Moroccans in EU fishing crews.

Bonino said on Friday that the EU and Morocco had agreed the

general framework for a new four-year agreement, one year longer

than the previous accord which was scrapped by Morocco at the

end of April.

In the new agreement, the EU will reduce fishing in Moroccan

waters and will land part of its catch in Moroccan ports.

Although Bonino gave no figures, sources said the EU would

reduce catches of squid and octopus by 40 percent, of shrimps by

between 30 and 34 percent and of sardines by 20 percent.

Morocco had initially demanded a 65 percent cut in catches

of squid and octopus -- the most important catch. Sardines,

which are the main catch for the numerous small-scale fishermen,

will be cut back the least.

EU vessels would also land 30 percent of their squid and

octopus catches in Moroccan ports by the end of the fourth year.

The EU would pay compensation of $162 million a year in

return for fishing rights, compared with $135 million under the

previous three-year accord.

The new agreement would also include better protection for

fish stocks, including stricter fisheries inspections.